Punchline – If this “brown paper bag” corruption is widespread in NSW, imagine what is happening with our Federal Government’s contracting departments where the $$$ stakes are so much higher.

But – “The investigation found no irregularities in the award of any tenders, nor any evidence to suggest preferential treatment was given to the firms in question.”

Nick McKenzie, Kate McClymont, Richard Baker

The NSW corruption watchdog has been given an explosive statement from a self-confessed corrupt senior public servant about kickbacks she received in return for tens of millions of dollars of government contracts.

It is also alleged several public servants may be involved in the scandal, which involves potentially tens of millions of dollars of service contracts at key state government sites across NSW, including the Sydney Harbour foreshore, the Powerhouse Museum, the Art Gallery of NSW and the State Sports Centre.

Former public servant Kylie Vernon admits to taking bribes. Photo: James Brickwood

Fairfax Media has learnt former public servant Kylie Vernon was called to a secret hearing with the Independent Commission Against Corruption in September last year.

She gave the commission details of suspect contracts, colleagues and alleged bribes paid by several NSW contractors.

Ms Vernon was sacked from Sydney Harbour Foreshore Authority (SHFA) in May after Fairfax Media revealed she had testified about receiving kickbacks when she was summoned to appear in a civil proceeding involving two cleaning contractors who had handled state government contracts.

But the involvement of ICAC and the extent of Ms Vernon’s allegations have not before been made public.

A former colleague of Ms Vernon’s told Fairfax Media that over the years her bosses received numerous complaints about Ms Vernon’s preferential treatment of the company at the centre of the allegations.

He also claimed that Ms Vernon was previously interviewed by ICAC in 2002 after two cleaning contractors complained about Ms Vernon’s actions in which her preferred cleaning company was awarded the $5 million contract to clean Darling Harbour.

Ms Vernon, who gave evidence of her corruption during a civil matter in the Supreme Court in March, also tendered a statement she had given to ICAC.

In her statement, she reveals she was first bribed by a large NSW contractor in 1998. She says the contractor “gave me a bag of cash totalling about $10,000”.

Ms Vernon awarded a five-year government contract to the company that had paid her the cash to provide various services at government managed buildings at The Rocks.

“Following the award of The Rocks [contract] … I would have regular Christmas meetings with” the contractor, Ms Vernon’s statement to ICAC says.

“On those occasions, [a company manager] … would give me a bottle of champagne and also in the parcel would be cash. This occurred during the period of the contract.”

Ms Vernon has told ICAC that in subsequent contracts, including a 2005 contract involving sites at Darling Harbour, she helped the company with its tenders.

“[I] was on the panel which awarded such contracts. I recollect telling [the contractor] … that they needed to improve their tender submissions and told them that they had to focus on environmental areas in their tender, as this would be a major criteria in the tender evaluation.

“Between about 1998 to 2013, I received approximately $200,000 in corrupt payments … relating to the assistance and the granting of contracts … by the SHFA.”

Ms Vernon’s statement discloses that she pocketed her last bribe in 2013. During a subsequent attempt to bribe her, Ms Vernon said she refused to take cash given to her by the contractor after a meeting in a car park.

“We then got into his car and drove around the corner to the carpark. We then put my items into my car and he put a cardboard bag into my car. When I got home I looked into the bag, I saw several envelopes containing cash. I decided I did not want it.”

It is understood that ICAC has been briefed on certain public servants, including a former senior official at a major government venue, who have been hired as consultants by private contractors.

However, in a statement to Fairfax Media, a spokesman for the Department of Finance, Services and Innovation said it had completed its investigation into Ms Vernon’s allegations. Ms Vernon refused to co-operate with departmental investigators who came to the conclusion that although Ms Vernon had taken bribes, she did nothing in return. “The investigation found no irregularities in the award of any tenders, nor any evidence to suggest preferential treatment was given to the firms in question.”